Lean and the Real Customer – Part 1

Lean and the Real Customer – Part 1

Article by Mark Gregory:

As I go about my daily business, like most people, I am continually exposed to varying levels of customer service from fantastic to (as Buzz would say) awful and beyond! Unlike most of the people around me though, I wonder whether the proprietors of this service really think and/or attempt to understand who the real customer is and what are their needs?

There are a couple of key enablers we talk a lot about in the lean philosophy: firstly, the value chain – the chain of activities and interactions that produces the output, be it a product or a service; secondly, the customers within the value chain – which is simply the next person in the chain or the receiver of the output of the previous activity. As those more conversant with lean philosophy will know, there are then a whole host of tools one can use to optimise this value chain and what the customer receives. There is of course as with all good philosophies, a higher purpose at play here as well, a why are we doing this at all question to be answered and principles to guide us to that higher purpose, but on the whole, in its simplest terms, it is about optimising customer value and experience.

So when I consider this service excellence, customer experience, customer loyalty or whichever other term you prefer conundrum, I just see the external customer as the end of a long value chain. While it is important to expend concerted effort to recognise all of my needs, wants and desires in an attempt to satisfy them and get me to buy, it strikes me that this is often out of balance with the effort put into satisfying the only customer truly in our circle of control the internal one, our employees.

It strikes me that the poor service I often receive is just the outward manifestation of the lack of engagement effort the employer has expended on the internal customer (the employee). In other words, the service outcome is merely a by-product of the engagement proposition, just as high levels of quality and productivity are, within the lean philosophy.

The evidence is there but we may just be looking in the wrong place. For example, in 1998 the Harvard Business Review published an article entitled “The Employee – Customer Profit Chain at Sears.” This article (worth a read by the way) talks about the turnaround and transformation undertaken over a three year period at Sears Roebuck Company, an American Department store chain. As with all good turnaround stories, it has the CEO and the senior leadership team climbing the torturous mountain of culture change to place the flag of victory at the peak. What however is more interesting, is the approach they took in climbing the mountain. They started with creating a compelling place to work or employee engagement. The second interesting point here is that they put just as much, if not more energy into this, as they did into the other key area of focus, the external customer. The result was that they found a direct correlation: a 5 unit increase in employee attitude drove a 1.3 unit increase in customer impression, which in turn drove a 0.5% increase in revenue growth.

So if the internal customer is the key to service excellence and customer loyalty how does lean help?

To be continued…. Click here for part 2

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